Welcome to one of our first articles at Money Making Expert. Through this guide we will go through the basic points of what you will need to consider when you’re looking at starting your own business. Many people think that going into business for yourself is daunting and scary, but it can actually be quite fun and it may not be as complicated as you might believe.

Getting Started

People will also say that in order to start a business you’ll need a business plan, however it’s not always necessary. Anyone can make a business plan sound like it will be successful but you can never truly know until you put it into action. Banks will require a business plan and investors typically do as well which is the main reason why a business plan will be needed. Although there can be additional benefits and while it may not need to always be an elaborate or extremely formal process like you would need for funding, a business plan can be an outline for how you see the business progressing, or your projections of the business’s future. It’s a tool to convey your business concept to others which is grounded in facts, numbers, and research that has an impact which just describing your business idea is unlikely to have.

The following are the points you need to think about before you start your business. Each point is also accompanied by an in-depth article on our website so be sure to read the articles that specifically cover each topic for more comprehensive information.

The Business Idea

The first thing you’re going to need is a great idea to base your business on and we’re going to presume you’ve already got one considering you’re already reading this guide. However, if you haven’t thought of an idea yet that inspires you, you may want to go to our money making tool to see if there’s anything you might be interested in doing or read our associated article below about “How to think of a Business Idea.”

Try sharing your idea with others to find out if it seems like a good prospect. Tell your family and friends about your business idea and ask them for their honest feedback. Although they may not be completely honest with you, this will give you a better insight into the strengths and weaknesses of your idea and you will also know that the assessments have come from people who presumably have your best interests in mind.

You’ll really know if your idea is a concrete one once you start doing your market research, which brings me to the next point, number 2.

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Market Research

Doing market research is a crucial step to determine if your business will likely survive and thrive. First, you need to identify who your target market will be, such as the specific demographics your product or service will most appeal to. Secondly, you need to figure out what will differentiate your brand from that of your competitors that will make your product or service more appealing to your target market. Does your business offer something exclusive that cannot be found elsewhere, or do you provide something better than your competition – better prices, superior service, extra services for free, etc?

You need to establish a spot for your business in your chosen field where you excel and can make a name for yourself, and then you need to determine how much your target market would be willing to pay for your product or service. By conducting market research, you can often find out which services or certain attributes matter most to your target market and how much they may be willing to spend in order to have what your business provides.

By using market research techniques such as surveys, focus groups, interviews, and examining other existing data sources that are available to you, such as competitor data, about your target market, you can learn a great deal of valuable information. You can find out where your market is located, better determine who your potential customers are, what the competition is like and much more.

Market research is an invaluable step when considering starting your own business and it will help you to know if there is a demand for what you are offering, to discover what you may need to change about your product or service in order to make it more appealing to your target market, and to better understand the competition that you will be up against in your chosen niche.

To learn more about the process of market research and for examples of how this has helped other businesses to succeed, please see our extensive article, “How to do Market Research.”

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Business name

We all know that a good name can make a business, and the wrong one can certainly doom it to failure. It can be challenging to try to think of the perfect name, and you don’t want to spend too much time on this, but you do need to consider it carefully.

You will want a name that is memorable, that represents or conveys what your business is about, and is available in a domain of the same name, among other things. Some common names could be your surname or initials and then a word about the profession, or a name that’s completely random or nonsensical but interesting or catchy, like Google or Apple.

It’s easier to choose a name thoughtfully in the beginning than to try to re-market your brand under another name later if there is an issue. For example, you will need to consider whether or not anyone else has a trademark or other business under the name you have chosen before you proceed. This can prevent you from having to deal with legal or other difficulties that could derail your business or set it back considerably.

If you haven’t chosen a business name yet, then read our article, “How to create a Business Name,” for more information and tips on how to make the right choice in selecting a name that will help your business succeed.

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Legal Business Structure

When starting a business, you need to decide what kind of business or legal structure you want it to be. Each structure has its pros and cons, so make sure that you understand them and evaluate their merits before making your choice. The structure will define your legal responsibilities such as filling in paperwork, paying taxes, how you can take the profit the company makes and what your role is if it makes a loss. In the UK, the most common types of businesses are Sole Traders, Limited Company’s and partnerships, whereas in the US, LLCs, or limited liability companies, and corporations are commonly used.”

Read our in-depth guide for guidance on finding out what the best legal structure may be for your business.

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Suppliers

Will your business depend on selling products or services, and if so, who will supply these if you are not producing them yourself? Find out who your potential suppliers are by researching suppliers in your country and don’t be afraid to look further afield either. If your product needs to be made, then find out who could manufacturer it for you. Don’t forget to include delivery and import tax into your overheads, especially if you’re importing from overseas.

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Location, Premises & Parking

This is a massive part of what can make your business successful. First of all, do you even need a physical location for your business? Not all businesses require an office, a storefront, or a public facility to operate their business from. In fact, many businesses, especially starting out, will operate from a home office location.

If you determine that you do need a physical location to set up shop, then choosing the location is critical. As the real estate saying goes, “location, location, location.” It can make or break a business because it can directly impact whether or not the business will be a success. You need to consider factors such as the availability of parking for customers, clients, and employees at all times of day, the demographics of the area that you choose (is this going to reach your target market base?), what sort of competition there may be from other nearby businesses, whether or not the building you are considering is able to support your needs such as for technology, the amount of traffic the location might bring to your business if it’s a retail business, as well as considerations such as rent and other building related expenses.

Too many times businesses fail at this step. Make sure to get this one right. It would be pointless starting a pet store in the middle of nowhere with no parking; it would also be fruitless to start a pet shop in a middle of a busy city with no parking. Work out what your priorities are and stick to them, don’t sacrifice parking for great premises, for example. You need to look at your overall needs and make sure that the location you choose will serve your business well, not only when you are starting out, but also in the foreseeable years to come.

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Overheads

Make sure to consider overhead expenses so you can know what you’re going to have to pay for. If you underestimate how much things are going to cost then you may struggle to hit your targets. Overheads can be expenses like insurance, security, staff, mortgage, rent and other rates. It’s always best to overestimate these charges so you can be sure that you’ll be able to cover all the costs. Anything you can think of that may even seem like small costs is worth including, in order to ensure your business will be able to afford to cover your total expenses. Predicting all the overheads allows you to create sound forecasting figures for the future of the business.

If you’d like to know more about all the things you may have to consider when calculating overheads, please read our detailed article. This is a very important consideration for any new business starting up. Many new businesses get blindsided by the costs that quickly accumulate. We look at the majority of business overheads and the ones that businesses overlook the most.

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Financial Projections

Some people believe it can be a good idea to estimate the future financial performance of your business. This involves estimating each year of your business’s performance after taking into account all of your expenses. It can also help to make it clear how well your business is doing throughout the year and it gives you targets to aim for. By using financial projections you can monitor various sectors of your business and implement different policies to prevent any deviation from your business interests. Not only can you use it to keep a clear view of where your business is heading, you can also combine it with a business plan.

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Funding

Now this is the time you may need a business plan. Does your business need funding in order to get it off the ground? If so, work out an estimate about how much you’ll need and research the potential funding sources available to you. Check out the Funding guide to look at the different methods for getting funding along with the pros and cons associated with each type.

You should only ever consider funding if you are not able to start or grow the business without it. Funding is hard enough to get as it is, so make sure you have a need that justifies the effort, risk, and the fees or interest that you will need to pay on the money that you borrow. In addition, some types of funding, such as that from certain kinds of investors, can come with a different kind of price tag – a loss of control in your business or a loss in a percentage or share of the profits. Businesses may apply for funding to purchase stock, buy machinery or even to cover the majority of overheads until the business can support itself. There are many different funding options available, but this is a decision that should be very carefully thought out and evaluated. Having the funds to start your business is critical, but so is the freedom to pursue the idea or inspiration that led you to start your business in the first place, as is the ability to profit from your business.

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The points we’ve listed here are just a few of many that you’ll need to consider. Every business has different needs, but if you do enough research and have a firm dedication to the process, you can be successful.

Remember be sure to share any questions you have or ask for any advice on the money making forum to help you get started.

“A journey of a thousand miles begins with a single step”

– Lao-Tzu